Bye bye budget

In the latest issue of Seller, two economics doctors, Jonas Riddarstråle and Knut Fahlén, tell us why the budget has played its part.

Jonas Riddarstråle, ranked as one of the world's leading thinkers in management, says that:

- Working on a budget requires that you have a reasonable hypothesis about what tomorrow will look like. But we live in a world that is far too complex for it to be possible, it is interconnected economically, technologically, politically and physically and it changes in turbo speed.

Knut Fahlén, a management consultant at Ekan who has helped many companies transition to budget-free governance, or dynamic management that Knut Fahlén would rather call it, says:

- In simple terms, it is about separating the processes that traditional budget work involves: forecasting, goal setting and allocation of resources.

Knut also says that interest in the approach is increasing. Statoil in Norway is a leader in the field and parts of Maersk in Denmark has recently submitted the budget. Lego is on the way, as well Jernia in Norway and Det Norske Veritas. Some Swedish companies that have started working on this issue are Volvo Cars, SKF, Alfa Laval, Atlas Copco, Ericsson, waterfall, Trelleborg, Ahlsell, Höganäs and Academic houses.

Jonas also thinks that the time has come and that the main reason is that the next generation will demand it.

- Those who are on their way out of working life now have a completely different approach to the dimension of time than we have. They are used to navigating around life in real time. They are not planning a crap, says Jonas Ridderstråle.

You can find the article in its entirety through the link below.

Article 2013-05-14 Bye Bye Budget

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